India’s merchandise exports reversed a 12.1% contraction in October (revised up from -16.7%), growing 0.6% on-year in November 2022 to $31.9 billion.

Core (non-oil, non-gold) exports ticked up 0.8% on-year, reversing the contractionary trend of the previous three months. This could partly be a result of last year’s low base for the corresponding month. But there was also a sequential improvement on-month. This suggests some resilience in demand for exports from advanced economies, perhaps because of the festive season there. Oil exports, however, fell, in sync with a decline in crude oil prices.

That said, sustaining export growth will remain a challenge, as global growth is expected to sharply slow next year.

Merchandise imports grew at a faster pace than exports. At $55.9 billion, they were up 5.4% on-year in November (vs. an upwardly revised 10.0% in October), led by higher core imports growth, indicating robustness of domestic economic activity. Oil import growth, on the other hand, slowed, helped by softening international crude prices.

Higher growth in imports than exports led to a wider trade deficit of $23.9 billion, compared with $21.2 billion a year ago. Sequentially, however, the trade deficit was narrower (vs $26.7 billion in October 2022), due to lower imports.

Year-to-date (April to November), merchandise exports were up 11.1% on-year to $295.3 billion, while imports rose 29.5% to $493.6 billion. As a result, the cumulative trade deficit was $198.3 billion, up from $115.4 billion in the year-ago period.